By Basil Katz and Dan Levine
Oct 4 (Reuters) – Dozens of lawsuits against Facebook Inc
, the NASDAQ exchange and various underwriters
will be centralized before a federal judge in New York, who must
sort through the legal aftermath of Facebook’s botched initial
public offering.
A panel of federal judges on Thursday ordered that cases
filed around the United States be transferred to U.S. District
Judge Robert Sweet in Manhattan. Facebook had requested the
transfer, while some investors sought to keep their cases in
California.
While some of the cases concern different defendants and
claims, “they do involve enough common questions of fact,
related circumstances and common discovery to warrant
centralization,” the panel said.
Facebook said in a statement that it was pleased with the
ruling, and that it would “vigorously” defend itself. An
attorney for some of the California plaintiffs declined to
comment, while a NASDAQ representative did not immediately
respond to a request for comment.
Investors say they lost money due to technical glitches on
the Nasdaq stock market and accuse the company of selectively
disclosing unflattering information about its business prospects
to Wall Street analysts who then shared it with privileged
investors.
The lawsuits, which are seeking unspecified damages, could
cost Facebook millions of dollars to defend as it strives to put
the IPO behind it.
Facebook’s stock tumbled as much as 50 percent after its
debut at $38 per share. It closed at $21.95 on Thursday.
In at least 33 lawsuits seeking class action status,
investors have asked courts to hold the company and its
underwriters responsible for causing their losses.
Facebook has said that it did not violate any rules and that
NASDAQ was to blame for trading glitches on the day of the
offering.
Grouping cases together keeps similar lawsuits from
proceeding at the same time in different courts.
Lawsuits against NASDAQ OMX Group Inc, which accuse the
exchange of being negligent in failing to execute trades in the
face of record-breaking volume during the IPO, will also be in
front of Sweet.
But the exchange has already asked that their cases proceed
on a separate track from the Facebook lawsuits.
The case is In Re: Facebook Inc, IPO Securities and
Derivative Litigation, U.S. Judicial Panel on Multidistrict
Litigation, No. 12-md-2389.
